Appendices
A. Contacts
B. Statutory Compliance
C. Electronic
Billing/Timekeeping
 |
|
2003 Statement of Polices Concerning Outside Counsel
Conflicts of
Interest
FDIC |
| Federal Deposit Insurance
Corporation |
|
|
| Washington, DC 20429 |
|
Office of the General Counsel |
December 2003
2003 Statement
of Policies
Concerning Outside Counsel Conflicts of Interest
These policies set for the guidelines for the FDIC with respect to
outside counsel conflict of interest matters. The policies are administered
and applied by the FDIC Legal Division.
In accordance with
the “Outside Counsel Conflict of Interest Procedures” issued
in December 1996, these policies apply to all requests by FDIC outside
counsel for waivers submitted to the FDIC Outside Counsel Conflicts
Committee.
The “Statement of Policies Concerning Outside Counsel Conflicts of
Interest” issued in June 1998 and December 1993, as well as the “Guidelines
of the FDIC/RTC with Respect to Conflict of Interest and Confidentiality and
General Policies of Waiver Favored by the Outside Counsel Conflicts
Committee” issued in May 1990, are hereby superseded.
These policies are effective immediately.
[signed]
General Counsel
Attachment
DECEMBER 2003
2003 Statement of Policies
Concerning Outside Counsel Conflicts of Interest
I. Introduction
The resolution of conflicts of interest in connection with
the selection and retention of outside legal counsel employed by the
Federal Deposit
Insurance Corporation ("FDIC") will be governed by these policies.
These policies are for the guidance of the FDIC Legal Division
in its relations with outside counsel, for the information of outside
counsel
who
have been or seek to be retained by the FDIC, and for the general use of
the FDIC Outside Counsel Conflicts Committee ("Conflicts Committee"). They
supersede the "Statement of Policies Concerning Outside Counsel Conflicts of
Interest”, issued in June 1998 and December 1993, as well as the “Guidelines
of the FDIC/RTC with Respect to Conflicts of Interest and Confidentiality
and General Policies of Waiver Favored by the Outside Counsel Conflicts
Committee” issued in May 1990.
Procedures for requesting waivers of outside counsel conflicts
are contained in "Outside Counsel Conflict of Interest Procedures" issued
in December 1996.
II. Definitions
As used in these policies:
"Conflict of interest" or "conflict" means a situation in which outside
counsel; any management official or affiliated business entity of outside counsel; or outside counsel’s employee,
agent, or subcontractor who will
perform professional services for the FDIC as a time charger: (1) has a personal, business, or financial interests
or relationships that would
cause a reasonable individual with knowledge of the relevant facts to question
their integrity or impartiality; (2) is an adverse party to the FDIC in
a
lawsuit; (3) submits an offer to acquire an asset from us for which services
were performed during the past three years, unless the agreement allows
for
the acquisition; or (4) engages in an activity that would cause us to
question the integrity of the service you provided, are providing or offer
to provide us, or impairs your independence.1
Under these policies, a conflict of interest includes any representation or
any interest adverse, potentially adverse, or presenting the appearance of
being adverse to the FDIC, whether or not it is of a nature sufficient to
affect counsel's legal judgment or ability to represent the FDIC zealously.
A conflict of interest may arise in litigation or in a non-litigated matter.
A conflict may also arise when outside counsel fail to cooperate with the
FDIC in the resolution of a fee bill audit performed by the FDIC Office of
the Inspector General.2
"Conflicts Committee" means the FDIC Outside
Counsel Conflicts Committee, which is responsible for resolving outside
counsel conflicts
of interest.
"FDIC" means the Federal Deposit Insurance Corporation
in all its capacities, whether as conservator, receiver, in its corporate
capacity,
organizer of a bridge bank, successor to the former Resolution Trust
Corporation, or successor to the former Federal Savings and Loan Insurance
Corporation.
"Institution" means any bank or savings association
the deposits of which are insured by the FDIC.
"Legal Services Agreement" or "LSA" means
an executed agreement between the Legal Division of the FDIC and outside
counsel setting
forth the terms
and conditions of
employment of outside counsel.
"Outside counsel" means a lawyer, law firm or
law firms providing services to the FDIC. The term includes all attorneys
in a firm, regardless
of their status or designation.
"Special Issues" mean (a) core issues concerning
the validity of the statutes under which the FDIC operates, the competency
of the FDIC
to act
under such statutes, the legitimacy of such conduct, and the rights, status
or powers exercised by the FDIC; (b) matters of first impression or
fundamental significance; or (c) matters of high visibility or sensitivity.
"Substantially related" means having a commonality
of law or fact between representation of the FDIC and representation
of another client.
"Waiver request" means
a written request for a waiver by outside counsel to the FDIC Legal Division
of an actual or potential conflict of interest or
a matter that may present the appearance of a conflict of interest.
III. Policy Objectives
The FDIC expects the highest ethical standards to be followed by outside
counsel. At a minimum, outside counsel must observe: (1) applicable state
bar rules of professional
conduct with respect to both conflicts of interest
and confidentiality; (2) the American Bar Association Model
Rules of Professional
Conduct ("Model Rules") to the extent that the
Model Rules are not contrary to applicable state bar rules; and (3) the
requirements of 12 C.F.R. Part 366.
The FDIC is particularly cognizant of the consequences in terms of public
perception of retaining outside counsel and seeks to avoid even the
appearance of conflicts of interest.
The Legal Division requires outside
counsel to represent the FDIC with undivided dedication and loyalty.
Therefore, these policies are not to be construed narrowly.
The FDIC requires outside counsel to observe
scrupulously all relevant
requirements of attorney-client confidentiality. Confidentiality is crucial
to the relationship of confidence and trust that the FDIC expects of outside
counsel. The Model Rules provide that the confidentiality principle extends
from information disclosed in confidence by the client to information gained
from any source regarding the representation and exists both during and
after the time of the representation. The FDIC is particularly concerned
with safeguarding confidences and proprietary information and will take
appropriate measures to ensure that such confidentiality is not jeopardized
or breached.
IV. Scope
In general, the FDIC
requires that any actual, potential, or appearance of a conflict of interest
be
reported to the conflicts coordinator in the
Legal Division office or section that is responsible for overseeing the LSA
with the outside counsel. There also are specific reporting requirements
contained in 12 C.F.R. Part 366 as amended or superseded. To the extent
these policies and 12 C.F.R. Part 366 differ in scope, the broader
interpretation controls. The Legal Division, and not outside counsel, will
make the determination whether a conflict exists. Procedures for requesting
waivers of outside counsel conflicts of interest matters are contained
in
the "Outside Counsel Conflict of Interest Procedures" issued by
the Legal Division. After a conflict has been reported, outside counsel must
notify
the Legal Division of any material change in facts.
On most matters, conflicts of interest with the Office of Thrift
Supervision, the Office of the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, the National Credit Union
Administration, and the Department of Justice (usually only on matters
involving closed Institutions or their directors and officers or related
third parties) are considered conflicts with the FDIC.
Even though an actual conflict, potential conflict, or appearance of a
conflict may be too remote to cause a court to order counsel disqualified,
the Conflicts Committee may nevertheless deny a waiver or take other
corrective action. When in doubt, outside counsel must disclose the matter
and seek a waiver.
A. Servicers
The FDIC may retain
the services of various entities to manage and dispose of failed Institutions'
assets
("Servicers"). These entities, in
turn, are authorized to retain outside counsel for purposes of managing and
disposing of the FDIC's assets. In these situations, outside counsel
are not
supervised directly by the FDIC and the degree to which attorneys of the
Legal Division exercise control over the selection of counsel varies.
Nevertheless, as contractors, Servicers are subject to the requirements
of
12 C.F.R. Part 366 and are also expected to adhere to these policies in
their entirety.
B. Subcontractors
The Legal Division may approve the retention of subcontractors,
particularly experts or consultants, for assistance, opinions or testimony
in the development of particular legal matters. These subcontractors may be
attorneys or non-attorneys. Generally such subcontractors are engaged by
outside counsel with approval from the Legal Division and
their services are
billed to outside counsel.3
When engaging experts or consultants or other subcontractors, outside
counsel must be cognizant of the requirements of the regulations at 12 C.F.R.
Part 366. Outside counsel
must make representations and certifications
regarding any disqualifying conditions (discussed infra) and conflicts of
interest of their subcontractors who will perform
professional services for
the FDIC as time chargers under the subcontract. Disqualifying conditions
and conflicts of interest of such subcontractors must be submitted to the
Conflicts Committee for appropriate action.
C. Subsidiaries
Outside counsel representing a subsidiary (regardless of the tier) of an
Institution under the control of the FDIC must submit any conflict of
interest to the Legal Division for consideration by the Conflicts Committee.
Further, outside counsel representing an interest adverse, potentially
adverse, or appearing to be adverse to a subsidiary also must submit any
conflict of interest to the Legal Division for consideration by the
Conflicts Committee.
V. Representational Conflicts Of Interest
Outside counsel may not, without a waiver, engage in a simultaneous
representation of the FDIC and another client having an interest adverse,
potentially adverse, or even appearing to be adverse to the FDIC. In the
event that outside counsel no longer represents the FDIC it may not later
represent another client against the FDIC in a matter substantially related
to any matter in which outside counsel previously represented the FDIC.
Examples of situations in which representational conflicts of interest
can arise include those matters in which outside counsel represent any of
the following:
(1) A client having an interest adverse to any Institution for which
the FDIC acts as conservator or receiver;
(2) An open Institution that subsequently fails or a client having an
interest adverse to such an Institution;
(3) A debtor-in-possession, trustee in bankruptcy, or a receiver in any
federal or state court or administrative proceeding in which the FDIC has
an interest, as a creditor or otherwise;
(4) A creditor in a bankruptcy, receivership, or other litigation
proceeding where the FDIC has asserted claims against the same debtor in
either the same or an unrelated proceeding;
(5) An insurance carrier or stockholder or class of stockholders in any
action against a director or officer of an Institution;
(6) An Institution regarding regulatory matters or assistance
transactions;
(7) An officer, director, debtor, creditor or stockholder of any failed
or assisted Institution in a matter relating to the FDIC; and
(8) A prospective bidder for a troubled or failed Institution, or the
assets of such Institution.
VI. Non-Representational Conflicts/Disqualifying Conditions
Generally, outside counsel must seek a waiver if outside counsel have any
type of interest adverse, potentially adverse, or even appearing to be
adverse to that of the FDIC, whether or not it is of a nature sufficient to
affect counsel's legal judgment or ability to represent the FDIC zealously.
In particular, a waiver must be sought if: (1) outside counsel cannot
subscribe to all of the representations and certifications required by 12 C.F.R. Part 366; (2) outside counsel have an ideological or other commitment
that would impair the outside counsel's judgment or ability to represent the
interests of the FDIC zealously; (3) the FDIC has a claim against outside
counsel or any of their individual attorneys; or (4) outside counsel have
been advised of a conflict of interest pursuant to an unresolved fee bill
audit.
A. Contractor Conflict of Interest Regulations
Disqualifying Conditions - The Contractor Conflict of Interest
Regulations at 12 C.F.R.
Part 366 prohibit the hiring of outside counsel who
have: (1) been convicted of any felony;
(2) been removed from, or prohibited
from participating in the affairs of, any insured depository institution
pursuant to any final enforcement action by the Office of the Comptroller of
the Currency, the Office of Thrift Supervision, the Board of Governors of
the Federal Reserve System, or the FDIC; (3) demonstrated a pattern or
practice of defalcation;4
or (4) caused a substantial loss to federal deposit insurance funds.5
Prior to retention outside counsel must also agree that they will not allow
any employee, agent, or subcontractor who will perform professional services
for the FDIC as a time charger to perform those services without verifying
that such individuals are not disqualified because of the existence of any
of the conditions above.
Outside counsel firms
or their “management officials” with one or more
disqualifying
conditions will be disqualified from working for the FDIC. For
a partnership, a management official is any member of the management
committee if such a committee exists or, if none, any general partner of the
firm. The Conflicts Committee will terminate outside counsel’s legal
services and direct the orderly transfer of work away from such firms. A
disqualifying condition that pertains only to an individual who is not a
management official may result in that individual’s being prohibited from
performing services for the FDIC.
Examples of Non-representational
Conflicts – Examples of situations in
which non-representational conflicts of interest can arise include those
matters in which outside
counsel or any management official, affiliated
business entity, or any employee, agent or subcontractor of outside counsel
who will perform professional services for the FDIC as
a time charger:
(1) Is an officer, director, or substantial shareholder of an
Institution;
(2) Has any outstanding debt, whether performing or in default, owed to
any failed Institution (excluding debts assumed by an operating
Institution);
(3) Is closely related to any person who is employed by the FDIC, is in
litigation with the FDIC, has outstanding debt owed to any failed
Institution or an ownership interest in such an Institution; and
(4) Served or serves as a trustee in bankruptcy or as a receiver in any
federal or state court or administrative proceeding;
(5) Is currently a party to an administrative or judicial proceeding in
which any of them is alleged to have engaged in fraudulent activity or has
been charged with the commission of a felony.
In addition, the regulations specify that outside counsel must disclose
whether they or their management officials, affiliated business entities,
employees, agents, or subcontractors are an adverse party to the FDIC in a
lawsuit (further discussed in part infra), or have ever been suspended,
excluded, or debarred from contracting with a federal entity, or have ever
had their legal services terminated by the FDIC prior to completion of the LSA for reasons that involved issues of conflicts of interest or ethical
responsibilities.
Prior to retention outside counsel must also agree that they will not
allow any employee, agent, or subcontractor who will perform professional
services for the FDIC as a time charger to perform those services without
verifying that such individual has no conflicts of interest.
B. Ideological or Other Commitment
Representation by outside counsel of borrowers in lawsuits against
lenders for alleged improper lending activities may constitute such a
commitment to a particular legal position or to particular special interests
as to constitute a conflict. Similarly, extensive
representation of
accountants or insurance companies on bond claims may also constitute such a
commitment.
C. Claims Against Outside Counsel
Investigation Ongoing – When
malpractice or similar claims by the FDIC against a law firm or individual
thereof are being investigated, Legal
Division staff may recommend to the Conflicts Committee that a moratorium
on new assignments be imposed on the firm. Once imposed, the moratorium
may be
removed only by action of the Conflicts Committee or the General Counsel.
Suit has been filed – If
a firm is sued by the FDIC for malpractice or similar claims, there is
a presumption
against continued use of that outside
counsel. It is FDIC policy that existing assignments are to be removed and
no new referrals are to be made. Exceptions to this policy may be granted
on
a case-by-case basis by the Conflicts Committee or the General Counsel.
If a suit against an individual attorney or employee does not also give
rise to a suit against his or her firm, the conflict must nevertheless be
reported and a waiver sought. Where a suit has been filed by the FDIC
against an individual attorney, the Conflicts Committee may allow the
attorney's firm to perform services for the FDIC if appropriate screening
mechanisms are established. However, the Legal Division may decline to use
the outside counsel firm if the alleged acts of an individual attorney are egregious, the livelihood of the firm
is heavily dependent on the individual attorney who is the subject of the
claims, or there are other factors that create an appearance of impropriety.
D. Unresolved Audit Issues
The FDIC Office of
the Inspector General and/or Internal Review Unit of the Legal Division
routinely audits
or performs post-payment reviews of
outside counsel billings and the supporting documentation for FDIC matters.
These audits or reviews are documented in reports that may question certain
costs and recommend that the Legal Division disallow and attempt to recover
such costs. Outside counsel are afforded the opportunity to respond to
these
reports. If the Legal Division agrees with the analysis and recommendation
and disallows all or a portion of the questioned costs, active resolution
efforts will be undertaken by the Legal Division and outside counsel
will be
given an opportunity to respond to the Legal Division’s requests for
repayment of disallowed amounts.
If outside counsel
fail to provide a response to the findings, or fail to remit the disallowed
costs, or
otherwise fail to respond adequately to the
issues raised in the report, pursuant to the “Statement of Policy on
Contracting with Firms that Have Unresolved Audit Issues with the FDIC,” 62
Fed. Reg. 13382 (March 20, 1997), outside counsel will be advised in writing
by Legal Division staff responsible for the audit that failure to cooperate
constitutes a conflict of interest with the FDIC. Unless the matter is
resolved to the FDIC’s satisfaction within ten business days of receipt of
the written notice, the matter will then be referred to the Conflicts
Committee for appropriate action, which may include a determination that
the FDIC refrain from soliciting any future services from outside counsel
and/or
termination of legal services on any existing legal referrals.
VII. General Waiver Policy
Generally, requests for waivers of conflicts of interest may be granted
or denied on behalf of the FDIC only by the Conflicts Committee or the
General Counsel.
Requests for waivers are considered only on a case-by-case basis.
Requests for waivers of hypothetical future conflicts of interest or
requests for blanket waivers covering multiple prospective unidentified or
hypothetical matters will not be considered. Silence on the part of the FDIC
may not be construed as a waiver; outside counsel should inquire of the
Legal Division if no response has been received for a previously disclosed
conflict.
A. Factors Considered in Granting Waiver Requests
When a waiver is requested, the Conflicts Committee will balance the need
to have adequate representation of the FDIC with all relevant factors.
Factors considered may include but are not limited to:
(1) The extent to which the FDIC's confidences may be compromised;
(2) The extent to which the outside counsel has been forthright in
bringing the existence of the conflict to the attention of the FDIC;
(3) Any appearance of impropriety;
(4) The presence of Special Issues;
(5) The feasibility of screening mechanisms;6
(6) The impact of replacing the outside counsel on matters presently
handled;7
(7) The nature and extent of the outside counsel's Institution
practice;
(8) The nature and extent of the outside counsel's representation of
accountants, attorneys, insurance companies, or directors and officers of
failed Institutions;
(9) The extent to which the representation or acts complained of are
factually or substantially related to matters currently or previously
handled by the firm for the FDIC;
(10) Whether an unfair advantage is gained as a result of the outside
counsel's continuing or past representation of the FDIC;
(11) Whether the conflict could affect the ability of outside counsel
to represent zealously the interests of the FDIC;
(12) In any pending or proposed litigation against outside counsel, the
nature of the conflict;
(13) The magnitude of any loss caused by the outside counsel's
representation or conduct;
(14) The extent to which any acts complained of represent actions of an
individual member or employee of outside counsel rather than a practice or
pattern of behavior commonly found within the firm;
(15) The extent to which the acts complained of draw into question the
competence or integrity of outside counsel; and
(16) The extent to which the FDIC is a significant client of the firm.
B. Matrix Guidelines
Conflicts of interest
arising from multiple representations are often complex. A matrix illustrating
positions generally taken by the Conflicts
Committee with respect to certain recurrent types of representational
conflicts is attached as Appendix A. The matrix is
intended to represent
a preliminary indication of the Legal Division’s general disposition
with respect to waivers of conflicts arising from representational conflicts.
It
should not be regarded as a determination on the question of waiver, which
can come only after a closer, more detailed consideration of a particular
situation, with knowledge of relevant facts and a weighing of appropriate
factors.
C. Inherited Conflicts
Outside counsel's representations
against an open Institution will place the firm in an adversarial position
to the FDIC upon the failure of that
Institution. The FDIC requires that
their outside counsel continue to screen
for conflicts, including those that develop because Institutions are
placed
in receivership or conservatorship. Such "inherited" conflicts are more
likely to be waived unless Special Issues are involved. In such
circumstances, the outside counsel usually will be prohibited from
performing work arising out of the particular failed Institution. Even if
outside counsel have obtained a waiver from the open Institution, the
outside counsel must, in the event of the Institution’s failure, also seek
a waiver from the Conflicts Committee.
VIII. CONDITIONS COMMONLY IMPOSED
If a waiver of a conflict
of interest is granted by the Conflicts Committee, various conditions
may
be imposed. In general, outside counsel
may not handle any matter pertaining to the same Institution out of which
the conflict arises. For example, if the Conflicts Committee grants a
waiver
to outside counsel representing a party suing the FDIC as receiver of a
particular Institution, such a waiver will ordinarily be conditioned upon
the outside counsel’s not handling any matters for the FDIC arising out
of that Institution, although it could handle matters arising out of
other FDIC
Institutions.
Depending on the facts
of each situation, conditions imposed may also preclude outside counsel
from
undertaking any new referrals from the FDIC
office or section involved or may require the imposition of screening
mechanisms, i.e., screening all attorneys who are involved in the adverse
representation, or are the subject of a claim, from working on any FDIC
matter, including access to the FDIC Legal Research Bank. Outside counsel
may also be precluded from performing any work at all for the affected
FDIC
office or section during the pendency of the adverse representation,
requiring that any current matters supervised by the particular office or
section be transferred to other counsel. This restriction is intended
to
prevent individual FDIC attorneys in a particular office or section from
having to deal with outside counsel as both "friend" and "foe" simultaneously.
A. Claims Against Outside Counsel
If a waiver of a conflict of interest arising from an FDIC claim against
outside counsel is granted by the Conflicts Committee, outside counsel may,
in addition to other conditions imposed, be required to:
(1) Agree not to assert as a defense to any claim the fact that the
outside counsel has been retained or is continuing to be retained by the
FDIC;
(2) Agree that no information obtained as a result of the retention
will be used in defense of any claim asserted by the FDIC;
(3) Agree that disclosure of any information by the FDIC in connection
with the continued retention shall not constitute a waiver of any
otherwise applicable privilege; and
(4) Prohibit any attorney who is the subject of a claim by the FDIC
from receiving any portion of the fees paid by the FDIC in any matter.
B. Settlement
The settlement of a claim or adverse representation brought against the
FDIC or by the FDIC may eliminate the existence of a conflict. If so, the
former conflict of interest will not automatically bar the continued use of
the outside counsel. Nevertheless, the FDIC may take the facts and
circumstances of the claim into account in assigning any future work. Any
conditions imposed when a waiver of the conflict was granted generally will
no longer be applicable. Upon settlement of the claim, outside counsel are
expected to provide written notification to the Legal Services Group in
Washington.
IX. Delegations of Authority
Previous delegations
of authority granted in the 1993 “Statement of
Policies Concerning Outside Counsel Conflicts of Interest” are hereby
rescinded. The Conflicts Committee will make determinations concerning those
conflict matters previously reviewed under delegated authority.
X.
Noncompliance
Failure to make full and timely disclosure of actual or potential
conflicts of interest, or matters that may present the appearance of a
conflict, as well as failure to comply with FDIC conflicts of interest
policies and procedures, are extremely serious matters. Such failures may
subject outside counsel to corrective action including, but not limited to:
(1) a letter of reprimand; (2) refusal to waive a conflict; (3) suspension
of new referrals; (4) rejection or reduction of fee bills; (5) withdrawal of
all pending matters; (6) termination of legal services; (7) imposition of a
bar to application; (8) denial of an LSA; (9) referral to the appropriate
state licensing authorities; and, in appropriate cases, (10) civil or
criminal actions.
XI. Conclusion
These policies are designed to provide general guidance only. Within the
framework provided by these policies, the Conflicts Committee and the staff
of the Legal Division exercise broad discretion. These policies do not
provide outside counsel with any right to a waiver.
Contact Information
The Legal Services Group in Washington has sole responsibility for the
distribution of outside counsel conflicts policies, procedures, and other
related conflicts information. For information, contact the Legal Services
Unit, 3501 Fairfax Dr., Room E-6066, Arlington, VA 22226. Telephone
Number (877) 275-3342.
See Contractor Conflict of Interest Regulations at 12 C.F.R. § 366.10.
Cf. Rule 1.7, 1.8, 1.9, and 1.10 of the Model Rules of Professional
Conduct.
See
Statement of Policy on Contracting with
Firms that Have Unresolved Audit Issues with FDIC, 62 Fed. Reg. 13382 (March
20, 1997).
In some
circumstances, experts or consultants on legal matters are retained and paid
directly by the Legal Division pursuant to its delegations of authority for
the provision of legal services. These experts or consultants may be
non-attorneys. As contractors, such experts or consultants are subject
to the requirements of 12 C.F.R. Part 366.
Because such contractors are
retained by the Legal Division instead of the Division of Administration,
the disqualifying conditions and conflicts of interest of such contractors
must be submitted to the Conflicts Committee
for resolution.
Defined under the regulations to mean two or more instances in which a loan
or advance from an insured depository institution is more than 90 days
delinquent in the payment of principal, interest, or a combination
thereof
and there remains a legal obligation to pay an amount in excess of $50,000.
Defined under
the regulations to mean: (1)An obligation to us that is delinquent for 90
days or more and on which there is an outstanding balance of principal,
interest, or a combination thereof of more than $50,000; (2) An unpaid final
judgment in our favor that is in excess of $50,000, regardless of whether it
becomes discharged in whole or in part in a bankruptcy proceeding; (3) A
deficiency balance following foreclosure of collateral on an obligation owed
to us that is in excess of $50,000, regardless of whether it becomes
discharged in whole or in
part in a bankruptcy proceeding; or (4) A loss to
us that is in excess of $50,000 that we report on IRS Form 1099-C,
Information Reporting for Discharge of Indebtedness.
The Conflicts Committee will consider such things as the: (i) size and
structural divisions of the law firm; (ii) likelihood of contact between the
affected attorneys(s) responsible for the adverse representation and firm
attorneys performing services on behalf of the FDIC; and (iii) existence and
effectiveness of measures to prevent the affected attorney(s) from gaining
access to current files or sharing information gained by the firm as the
result of its FDIC representation.
|
Appendix A -
Probable Conflicts
Committee Reaction to Requests for Waiver of Certain Conflicts Arising from
Multiple Representation
|
Represent FDIC:
& Adverse to FDIC on:
|
Prof. Liability
|
Routine
Closed Inst.
|
Closed Inst.
w/Special
Matters
|
Negotiated
Transaction
|
Employment
Matters
|
Professional
Liability |
- |
+ |
+ |
+ |
+ |
| Routine Closed
Institution |
+ |
+ |
+ |
+ |
+ |
| Closed
Institution with Special Issues |
+ |
+ |
- |
+ |
+ |
Negotiated
Transactions |
+ |
+ |
+ |
- |
+ |
| Employment |
+ |
+ |
+ |
+ |
- |
| Enforcement |
- |
+ |
+ |
+ |
+ |
General FDIC
Corporate &
Regulation |
- |
+ |
+ |
+ |
+ |
Notes:
1. Generally, the FDIC disfavors waivers of Professional Liability,
Special Issues, and Negotiated Transactions matters if the firm seeking the
waiver is working on the same type of matters for an adverse party. The FDIC
generally permits their firms to perform Routine Closed Institution work
against the FDIC (representing other creditors, bidders, asset purchasers,
etc.), but not out of the same Institution or the same FDIC office or
section. Also, in order to avoid even an appearance of impropriety and to
ensure the integrity of the bidding process, a firm that has represented a
failed Institution generally will not be permitted to bid or represent a
bidder on that Institution or its assets.
2. The sign "+" means the Conflicts Committee is more likely than in the
case of the sign "-" to waive a conflict. This assumes that the conflict
does not (i) arise from the same transaction, (ii) to the extent that it can
be determined at the time a waiver is sought, involve litigation in the same
court, or (iii) arise within the same conservatorship, receivership or
office or section primarily responsible for the matter.
3. The matrix addresses only conflicts that may arise out of multiple
representations by outside counsel. It does not address conflicts that may
arise out of relationships or adverse interests separate and apart from
representations, nor does it address the
issue of confidentiality. A waiver
of a conflict in connection with a multiple representation is not an
authorization to breach confidentiality.
4. "Professional Liability" refers to claims arising out of conduct by
those providing professional services, advice, or counsel to Institutions
including, but not limited to, directors, officers, attorneys, accountants,
appraisers, securities or commodities brokers, as well as fidelity bond and
insurance issues involved in those claims.
5. "Routine Closed Institution" refers to asset collections, defensive
matters, deposit insurance cases, and representation of bidders, whether
litigated or non-litigated, where the issues raised do not involve Special
Issues as previously defined.
6. "Negotiated Transactions" refers to those resolution transactions
necessary to resolve the status of failing or failed Institutions where
substantial negotiations are required to reach and document an agreement.
7. "Employment" refers to matters involving disputes between the FDIC and
its employees.
8. "Enforcement" refers to matters involving FDIC administrative
enforcement powers including, but not limited to, cease-and-desist,
termination of insurance, suspension or removal, and assessment of civil
money penalty proceedings.
9. "General FDIC Corporate & Regulations" refers to matters involving the
FDIC as a corporation and the FDIC as regulatory agency or insurer
including, but not limited to, the scope of corporate powers, the
applicability of various statutes and regulations to day-to-day operations,
and the applicability of various statutes and regulations to Institutions'
operations. Generally, undertaking an adverse representation involving
General FDIC Corporate and Regulations will be disfavored if outside counsel
represents the FDIC on Professional Liability matters. Each matter is
reviewed on a case-by-case basis however.
10. In the event that outside counsel may be requested to represent
contractors in disputes regarding contracts with the FDIC or RTC, or in
administrative proceedings involving the proposed suspension or exclusion of
contractors, the Conflicts Committee will consider such waiver requests on a
case-by-case basis, but generally will not favor such requests where outside
counsel are representing the FDIC in other than Routine Closed Institution
matters. Such matters are not considered General FDIC Corporate &
Regulations matters.
|
